Archive for the
‘Chart School’ Category
by Zero Hedge - November 15th, 2018 8:51 am
Courtesy of Lance Roberts, RealInvestmentAdvice.com
In Tuesday’s technical update, I discussed the breakdown in the major markets both internationally as well as domestically. Of note, was the massive bear market in China which is currently down nearly 50% from its peak.
What is important about China, besides being a major trading partner of the U.S., is that their economy has been a massive debt-driven experiment from building massive infrastructure projects that no one uses; to entire cities that no one lives in. However, the credit-driven impulse has maintained the illusion of economic growth over the last several years as China remained a major consumer of commodities. Yet despite the Government headlines of economic prosperity, the markets have been signaling a very different story.
In the U.S., the story is much the same. Near-term economic growth has been driven by artificial stimulus, government spending, and fiscal policy which provides an illusion of prosperity. For example, the chart below shows raw corporate profits (NIPA) both before, and after, tax.
Importantly, note that corporate profits, pre-tax, are at the same level as in 2012. In other words, corporate profits have not grown over the last 6-years, yet it was the decline in the effective tax rate which pushed after-tax corporate profits to a record in the second quarter. Since consumption makes up roughly 70% of the economy, then corporate profits pre-tax profits should be growing if the economy was indeed growing substantially above 2%.
Corporate profitability is a lagging indicator of the economy as it is reported “after the fact.” As discussed previously, given that economic data in particular is subject to heavy backward revisions, the stock market tends to be a strong leading indicator of recessionary downturns.
Prior to 1980, the NBER did not officially date recession starting and ending points, but the market turned lower prior to previous recessions.
Besides the stock market, economically sensitive commodities also have a tendency to signal changes to the overall trend of the economy given their direct input into both the production and demand sides of the economic equation.
Oil is a highly sensitive indicator relative to the expansion or…
Posted in Chart School, Immediately available to public, Phil's Favorites | No Comments »
by kimblechartingsolutions - November 15th, 2018 7:18 am
Courtesy of Chris Kimble.
Gold, Silver, and the precious metals industry have a pretty simple relationship with the U.S. Dollar: They perform better when the Dollar is weakening… and they tend to struggle when the Dollar is strengthening.
One of our favorite ratios to monitor for Gold Bugs is the U.S. Dollar/Gold ratio. It tells us when the Dollar is weakening or heading lower (which is good for gold) or when it is strengthening or heading higher (bad for gold).
Looking at the Dollar/Gold chart below, we can see that the ratio climbed higher from late 2011 to early 2016. This wreaked havoc on Gold prices. Since peaking in early 2016, the ratio has formed a broad declining channel (pink shaded area). Each swing lower has provided a tailwind for Gold prices, while each counter-swing higher has been a headwind.
in early 2018, the ratio tested the bottom of the channel before reversing higher and strengthening throughout much of this year. This move back toward the top of the channel has kept Gold prices subdued this year.
There’s hope for Gold bugs!
The U.S. Dollar/Gold ratio may be forming a “lower double top” just below falling channel resistance at (1). And each of the prior highs has coincided with momentum peaks (top box of the chart). As you can see, momentum looks to have peaked once again… and may be rolling over.
The Takeaway: Gold bugs would love to see a double top bearish reversal at point (1) on the U.S. Dollar/Gold ratio. This has NOT been confirmed just yet, but the ingredients are there. Stay tuned!
U.S. Dollar Gold Ratio Chart – Double Top?
CLICK ON CHART TO ENLARGE
This article was originally written for See It Markets.com. To see original post CLICK HERE
–
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by kimblechartingsolutions - November 14th, 2018 7:57 am
Courtesy of Chris Kimble.
Key stock market indices continue to struggle beneath 800-pound Fibonacci extension levels (resistance).
In today’s “6-pack” chart, we illustrate these key bull/bear lines for investors – see below. The Dow Jones Industrials, Transports, S&P 500, and Nasdaq 100 are all experiencing weakness and selling pressure at long-term Fibonacci extension levels each at (1).
But the overhead resistance spreads to other key sectors like the Banks and Semiconductors. The Banks are experiencing weakness at the 2007 highs at (2) and the Semiconductors are experiencing weakness at the 2000 highs at (3).
Expect market weakness (or consolidation) to continue until these stock indexes and key market sectors breakout above resistance. Stay tuned!
6-Pack of Stock Market Indices – Long-Term Resistance
CLICK ON CHART TO ENLARGE
This article was first written for See It Markets.com. To see original post CLICK HERE
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by kimblechartingsolutions - November 13th, 2018 9:23 am
Courtesy of Chris Kimble.
CLICK ON CHART TO ENLARGE
This 4-pack looks at the DJ Home Construction, Banks, Junk Bonds and the S&P 500, highlighting that bearish divergences took place in 1999 and 2007 at each (1). These assets were sending bearish topping messages “BEFORE” the tops in 2000 & 2007.
Looking at this year, each asset has been creating bearish divergence since early 2018 at each (2).
Are each of these assets sending an important Risk/Reward message again or will it be different this time?
Just the Facts Ma’am– The majority of stock indices remain above respective February lows at this time, as they remain inside of horizontal trading ranges!!! If these trading ranges would happen to break to the downside, odds increase these divergences have been sending important messages to stocks for months!
If you would like to hear more about these divergences and why long-term trends could be changing, we are presenting a FREE WEBINAR this afternoon, that you should benefit from. CLICK HERE FOR WEBINAR TOPICS AND SIGN UP.
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by ilene - November 12th, 2018 4:17 pm
My Chart o’ the Day comes to us from my pal Ari Wald, technician at Oppenheiner & Co, who takes a look at the 30 largest stocks and finds enough to like to be supportive of a year-end rally. Ari notes that last week’s gap above the 200-day in the S&P 500 could serve as decent enough support for continued run.
Here’s his glance at the biggest stock on earth, Apple, which is still in a breakout, despite October’s tumult…
Key takeaway: AAPL checks all of our boxes. Shares are correcting in an uptrend and supported by top-down tailwinds based on our view that the Technology sector is a prime candidate to be a key driver of the S&P 500’s secular advance over the coming years.
Josh here – Apple is one of the largest influences on the price-weighted Dow Jones Industrial Average, it’s also enormously important to both the Nasdaq 100 and the S&P 500. Additionally, it’s owned in both growth and value funds, dividend and buyback funds, tech sector funds and consumer-driven strategies. Needless to say, it’ll be the stock to watch as November grinds on.
Source:
The Blue Chip Report
Oppenheimer & Co – November 10th, 2018
Follow Ari on Twitter!
Posted in Chart School, Phil's Favorites | No Comments »
by kimblechartingsolutions - November 12th, 2018 9:08 am
Courtesy of Chris Kimble.
CLICK ON CHART TO ENLARGE
This chart looks at the yield of the 2-year note and its 5.5-year performance since 1999. The 2-year yield looks to have double bottomed in 2013 and since then it has been swiftly moving higher inside of rising channel (1). The 2-year yield is currently up over 1,100% since the lows in 2013. This rally has yields testing the top of rising channel (1) and 18-year falling resistance at (2) at the same time.
Is the 2-year yield the only interest rate testing a long-term inflection point?
The 4-pack below looks at patterns of 2, 5, 10 and 30-year yields-
CLICK ON CHART TO ENLARGE
This 4-pack highlights that the sharp rally in yields over the past few years has each testing long-term falling resistance lines at each (1), while monthly momentum is currently hitting levels not seen in decades at each (2).
These 20 to 30-year falling resistance lines look to be creating multi-decade opportunities/inflection points in bonds, which could impact stocks!
If you would like to know how one could take advantage of these multi-decade opportunities, join us for a FREE WEBINAR TOMORROW, where we will discuss these and many more rare multi-decade opportunities that are in play.
Sign Up for FREE WEBINAR HERE.
–
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by Chart School - November 11th, 2018 1:38 pm
Courtesy of Blain.
This past week was saw another positive move up by bulls – especially in the Dow and S&P 500; the NASDAQ was not quite as enthusiastic. Wednesday’s rally was on the legs of an election that was seen as market friendly or at least not as bad as it could have been. Essentially – paying people a lot of money to get nothing done the next 2 years – woo hoo!
The market is interpreting Wedneday’s result as insuring that “no big things will get done,” in Washington between now and 2020, Craig Birk, chief investment officer at Personal Capital told MarketWatch. “The market appreciates the relative certainty of the slow legislative agenda.” he said.
“As President Trump plans his 2020 reelection campaign, a gridlocked Congress is unlikely to deliver any notable wins to help expand his agenda. Therefore, Trump will likely focus on his broad executive powers to affect trade and national security,” wrote Dec Mullarkey, managing director, investment strategy, Sun Life Investment Management, in a research note.
We are still seeing quite a bout of volatility – usually rallies that will last will settle into some sort of “calm” so we are not there yet. In fact the move to the upside got so extreme mid week that the NYSE McClellan Oscillator actually went to overbought levels for the first time since spring (more on that below).
Nothing of note from the Federal Reserve Thursday – exactly as expected:
In a statement that was largely intact from its September meeting, the Fed said, “The Committee expects further gradual increases in the target range for the federal funds rate.” It also said the risks to the economic outlook “appear roughly balanced” and noted that inflation remains near its 2% target.
The absence of any major changes to its commentary suggests that the central bank plans to raise interest rates in December and plans three hikes next year, in line with market expectations.
Massive drop in oil the past…
Posted in Chart School, Immediately available to public | No Comments »
by kimblechartingsolutions - November 10th, 2018 10:32 am
Courtesy of Chris Kimble.
CLICK ON CHART TO ENLARGE
They say “History doesn’t repeat, but sometimes it rhymes!” This weeks election results are being contested in Florida, similar to what happened in 2000.
In the fall of 2000, the S&P made a nominal new high. Momentum was diverging (creating lower highs) and a bearish-rising wedge was forming. We all know the results once support of the rising wedge took place.
Is the S&P 500 repeating patterns now similar to 2000? This fall the S&P made a nominal new high; momentum is diverging (creating lower highs) and a bearish- rising wedge could be in play.
Will history repeat exactly this year? I doubt it. But, if multi-year rising support does happen to give way, selling pressure could increase similar to 2000.
–
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by kimblechartingsolutions - November 10th, 2018 8:44 am
Courtesy of Chris Kimble.
The latest stock market correction and swing lower has seen momentum drop to extreme lows (on a intermediate-term basis). This poses a bit of a conundrum because stocks have been struggling since hitting historic longer-term momentum highs.
So what do investors make of this going forward? Let’s look at a couple of four-pack charts.
The first 4-pack of charts looks at the “daily” Equal Weight S&P 500, Russell 2000, Dow Transports and NYSE Composite. All of these important stock indexes are in horizontal trading ranges with momentum at the lowest levels in the past couple of years.
This has helped stocks bounce nearly 8 percent off the lows.
Stock Market Index “Ranges” (support at momentum lows)
CLICK ON CHART TO ENLARGE
The next 4-pack of charts is a longer-term look at “monthly” bars for the Equal Weight S&P 500, Russell 2000, Dow Transports and NYSE Composite. In addition to testing the bottom of their trading ranges, the stock indexes are also testing 8-year+ rising support at each (1)… with momentum at/or above 2007 levels.
CLICK ON CHART TO ENLARGE
How these two timeframes reconcile will be important for investors.
If support at each (1) would give way, monthly momentum has a long way to go to get oversold. From a big picture perspective, the support test a (1) could be huge!
This article was first written for See It Markets.com. To see original post CLICK HERE
–
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
by kimblechartingsolutions - November 9th, 2018 8:40 am
Courtesy of Chris Kimble.
CLICK ON CHART TO ENLARGE
Joe Friday suggested that Crude Oil could be peaking in the chart above first shared on 5/25/18, as Crude was testing its 50% retracement level at (2). Weakness in Crude of late has it down near 20% from recent highs. Crude is one of the most important commodities on the planet and big moves in it can ripple into other assets.
Below looks at a chart of Crude Oil and the Yield of the 10-year note–
CLICK ON CHART TO ENLARGE
Sometimes Crude Oil and the yield on the 10-year note have declined together over the past 13-years at each (1). Crude Oil weakness of late has it breaking 3-year support at the top of a rising channel at (2).
Joe Friday Just The Facts Ma’am- The yield on the 10-year note is kissing the underside of 10-year resistance at (3). Further weakness in Crude could be suggesting that interest rates are near an important peak, where a decline in rates could start.
–
To become a member of Kimble Charting Solutions, click here.
Posted in Chart School, Immediately available to public | No Comments »
German
Spanish
French
Italian
Portuguese
Japanese
Korean
Russian
Chinese
Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site